EUR/USD 5M
The EUR/USD pair was trading quite calmly again on the first trading day of the new week. The total volatility of the day this time did not exceed even 50 points. This is not surprising, since there were no important or interesting events on Monday, either in the European Union or in the United States. Thus, market participants simply had nothing to react to during the day. The euro/dollar pair still shows its interest in the resumption of the global upward trend, but this might take a very long time, since volatility in most cases does not exceed 60 points. Only two trading signals were generated for the pair on Monday, but what kind! These signals can be safely entered into a trading textbook. The price reached an important level or line at both times, after which it bounced off them perfectly. Let's see what trades should have been opened and how much you could earn. The first signal - a rebound from the level of 1.1881 - was formed in the middle of the European session. Traders had to open short positions here, and the price subsequently dropped to the critical line and rebounded from it. It was this rebound that served as a signal to close shorts and open longs. After that, the price went up by about 20-25 points, but did not reach the level of 1.1881. In the middle of the US trading session, the long position should have been manually closed at a profit of about 20 points. We managed to earn 25 points on the first short position. Therefore, traders could have made a profit of about 45 points in total on Monday, despite the fact that the volatility was 50. Excellent result!
Overview of the EUR/USD pair. July 13. Coronavirus attacks again. The global economic recovery is under threat again.
Overview of the GBP/USD pair. July 13. An abnormal and illogical pound.
EUR/USD 1H
Yesterday's movements looked rather dull and sluggish on the hourly timeframe. No wonder, as volatility was weak again. On the whole, an upward trend was formed for the pair after the price surpassed the downward trend line. Thus, we continue to expect a continuation of the upward movement, but so far traders have failed to draw the pair through the Senkou Span B line, which is very important for future prospects. On Tuesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1807, 1.1881, 1.1922, as well as the Senkou Span B (1.1890) and Kijun-sen (1.1830) lines. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. Signals can be rebounds or breakthroughs of these levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price moves 15 points in the right direction. This will protect you against possible losses if the signal turns out to be false. Today, the US is set to publish a very important report on inflation for June, but the reaction to it can only follow if the actual value is very different from the forecast. No more important fundamental and macroeconomic events are planned for today.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair fell by 100 points during the last reporting week (June 29-July 5). Thus, one could expect to see a new weakening of the bullish sentiment of professional players in the Commitment of Traders (COT) report. This is exactly what we saw in the latest report that was released on Friday. The number of buy contracts (longs) for the reporting week increased by 4,000, and the number of sell contracts (shorts) - by 16.5 thousand. Thus, the net position of the "non-commercial" group of traders decreased by 12.5 thousand. Therefore, at the moment we can say that market participants continue to get rid of long positions and build up shorts. Therefore, it is possible to predict a further fall in the European currency. But not everything is so simple. We have already said that the movements of the pair over the past few months look just like a correction against the global upward trend. In addition, the US government and the Federal Reserve continue to inject hundreds of billions of dollars into the US economy, inflating the money supply and stimulating inflation. Therefore, big players can get rid of euro positions, but at the same time the dollar supply in the markets will grow, which may lead to the opposite effect. A situation may arise in which the net position of professional players on the euro will decline, while the euro currency will grow. Actually, in October-November-December 2020, this is exactly what happened. The green line of the first indicator (net position of the non-commercial group) was decreasing, while the euro was growing. Thus, we recommend that traders pay more attention to technical analysis.
Explanations for the chart:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
Indicator 1 on the COT charts is the size of the net position of each category of traders.
Indicator 2 on the COT charts is the size of the net position for the non-commercial group.
